Madison Investments, an investment advisor, released its “Madison Small Cap Fund” fourth-quarter 2024 investor letter. A copy of the letter can be downloaded here. The Madison Small Cap Fund completed a great year in the fourth quarter. For the fourth quarter and the entire year, the fund generated strong absolute and relative returns. Growth continued to beat value, while large caps continued to outperform small caps on average. In the fourth quarter, the fund (class I) returned 4.04% outperforming a (0.33%) return for the Russell 2000 Index and a (0.62%) return for the Russell 2500 Index. The outperformance was driven by stock selection and favorable allocation. In addition, looking at the entire year, the performance exceeded benchmarks by an even greater margin. Despite the Russell 2000 Index’s 11.55% annual gain, the fund outpaced the benchmark by a whopping 900 basis points, reporting a 22% overall return. Although advantageous sector allocation also helped, stock selection accounted for the vast bulk of the outperformance. In addition, you can check the fund’s top 5 holdings to know its best picks in 2024.
In its fourth quarter 2024 investor letter, Madison Small Cap Fund emphasized stocks such as Medpace Holdings, Inc. (NASDAQ:MEDP). Medpace Holdings, Inc. (NASDAQ:MEDP) is a clinical research-based drug and medical device development services provider. The one-month return of Medpace Holdings, Inc. (NASDAQ:MEDP) was 0.84%, and its shares lost 13.14% of their value over the last 52 weeks. On February 14, 2025, Medpace Holdings, Inc. (NASDAQ:MEDP) stock closed at $340.17 per share with a market capitalization of $10.364 billion.
Madison Small Cap Fund stated the following regarding Medpace Holdings, Inc. (NASDAQ:MEDP) in its Q4 2024 investor letter:
“Medpace Holdings, Inc. (NASDAQ:MEDP) is the leading CRO (contract research organization) with a focused model on the Biopharma industry. The focus on small and medium-sized biopharmaceutical companies leads to customer intimacy, consistent execution, and fixed pricing, which are the keys to the company’s moats and consistent market share gains over the last 10 years. Despite large swings in biotech funding, MEDP has driven sequentially positive revenue growth since 2015 and continues to boast an impressive backlog of business, which we believe can drive durable growth going forward. MEDP has a pristine balance sheet, generates healthy free cash flow (20%+ margins on earnings before interest, taxes, depreciation and amortization), and is opportunistic with stock buybacks. We estimate intrinsic value at $450.”
A medical professional in a lab coat discussing with a colleague.
Medpace Holdings, Inc. (NASDAQ:MEDP) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 41 hedge fund portfolios held Medpace Holdings, Inc. (NASDAQ:MEDP) at the end of the third quarter which was 37 in the previous quarter. Medpace Holdings, Inc.’s (NASDAQ:MEDP) fourth quarter revenue was $536.6 million, up 7.7% year-over-year and full year 2024 revenue was $2.11 billion, up 11.8% from 2023. While we acknowledge the potential of Medpace Holdings, Inc. (NASDAQ:MEDP) as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as NVIDIA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
In another article we discussed Medpace Holdings, Inc. (NASDAQ:MEDP) and shared Giverny Capital Asset Management’s views on the company. In addition, please check out our hedge fund investor letters Q3 2024 page for more investor letters from hedge funds and other leading investors.
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Disclosure: None. This article is originally published at Insider Monkey.